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Measures for Sustainable Investment Decisions and Business Strategy – A Triple Bottom Line Approach
Author(s) -
CubasDíaz Maite,
Martínez Sedano Miguel Ángel
Publication year - 2018
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.1980
Subject(s) - triple bottom line , profitability index , sustainability , investment (military) , measure (data warehouse) , business , investment decisions , corporate social responsibility , sustainable business , sustainable development , environmental economics , economics , computer science , finance , behavioral economics , ecology , database , politics , political science , law , biology
Traditionally, most investors have only taken economic variables (profitability and risk) into account when making investment decisions. In this paper we propose two measures, the Relative Sustainable Performance Measure (RSPM) and the Measure of Commitment‐failure (MC), that permit sustainable decision making, which takes environmental and social variables into consideration in addition to the economic variables, for both investors and companies themselves. This makes a triple bottom line (TBL) approach to investment decision making possible. We apply our measures to the worldwide chemical sector and validate them. Moreover, we propose a 2D graphical sustainability analysis , which is simple and easy for investors to understand when making investment decisions and can be used if they are concerned about environmental and social matters. It also enables companies to analyse their sustainability performance and adapt their business plans accordingly. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment